Asian shares rally on dovish Fed expectations

Asian equities kicked off the trading week on a positive note after a weak U.S. employment report on Friday cooled expectations that the Federal Reserve will start raising interest rates soon.

Markets in China remain closed until Wednesday for National Day holidays.

September's closely-watched jobs report showed the U.S. economy created 142,000 jobs, far below the expected 203,000. Unemployment held at 5.1 percent while the participation rate plunged to 62.4 percent, according to the Labor Department. Indications of softness in the labor market mean the Fed is unlikely to begin tightening monetary policy soon, analysts say. Fed funds futures are now pricing the first rate hike to come no earlier than March 2016.

With China closed for holidays, there will be no [trading] direction for Asia for a couple more days, said Evan Lucas, IG market strategist, in a morning note. "But the conclusion from the U.S. nonfarm payrolls is that the China slowdown is spreading across the Pacific. This will only add to expectations that the People's Bank of China or central government will move monetary policy this year."

The auto sector was in focus on expectations it could benefit from the Trans Pacific Partnership talks that continued over the weekend. If a deal is inked, it would give automakers a freer hand to buy parts for vehicles sold in the United States from Asia; Mazda Motor jumped 1.4 percent while Mitsubishi Motors lost over 2 percent and Toyota Motor inched down 0.1 percent.

Australia's S&P ASX 200 clinched a two-week high, recouping all of Friday's 1.2 percent loss thanks to a rally in the resources sector. However, volumes were 61 percent below their 30-day average due to the public holiday in New South Wales, IG warned.

"The RBA is fraught with the dilemma of China/global headwinds amid spots of asset market bubbles. But despite persistent pressures on commodities, the RBA will not jawbone the Australian dollar given sharp corrections and risks skewed to more downside volatility," noted Vishnu Varathan, senior economist at Mizuho Bank.

Hong Kong adds 1.4%

Hong Kong's Hang Seng Index also rose to a two-week high, rising as much as 2 percent, as investors engaged in bargain hunting.

South Korea's benchmark Kospi index pared gains in afternoon trade but still ended at its highest level since September 18.

Automakers declined despite a survey from market researcher FnGuide predicting improved earnings for the sector during the third quarter; Hyundai Motor and Hyundai Mobis fell more than 1 percent each while Kia Motors lost over 2 percent.